I saw this quote from Mick Jagger at least 5 times in different blogs in my Google Reader,
…people only made money out of records for a very, very small time. When The Rolling Stones started out, we didn’t make any money out of records because record companies wouldn’t pay you! They didn’t pay anyone!
Then, there was a small period from 1970 to 1997, where people did get paid, and they got paid very handsomely and everyone made money. But now that period has gone.
So if you look at the history of recorded music from 1900 to now, there was a 25 year period where artists did very well, but the rest of the time they didn’t.
I think people are fascinated about what Jagger has to say since he is one of the most wildly successful and no doubt wealthy recording musicians of all time with career longevity most artists envy. Plus, he’s rich, right? Is he saying it was just good timing? (Nah, I’m certain some of that musical genius and epic charisma had something to do with it.) However, despite Tyler Cowen’s friendly rib that Jagger is no economist, the phenomenon Jagger is talking about is no less true and is explained further by Daniel Wolf of Renewable Music,
That date [Jagger is referring to] in the late 90′s coincides rather precisely with the mass introduction of cheap digital recording equipment and media as well as the widespread use of portable digital players. The old model of radio advertising paying royalties for recorded music which was licensed cheaply for broadcast with the idea that randomly-heard broadcasts of songs were advertisements for the purchase of albums — which allowed the listener to select particular songs on their own — pretty much collapsed at that point in time. The technological innovations leading to ever-cheaper and ever-more accurate recording and storage capacity were inevitable but the whole thing gets ugly when one considers that the firms selling the new recording technologies were, in many cases, also publishers of the music that was inevitably going to be recorded.
The “gets ugly” Wolf is referring to is the loss of revenue to individual artists. (Check out this scary graphic re: distribution of profits in the music world via NewsObserver TechJunkie.) This is admittedly a problem for most artists aiming to have a recording and performing career. Wolf further notes, and correctly in my opinion,
Although recordings and webcasts may have some advertising function, in the end, the grand experiment [of commodifying music] may leave us back where we started, with live performance the most important — and in many cases, only — opportunity for a musician to earn money.
While I will only mention the can of worms that is the issue of Baumol’s cost disease in live performance, I think Wolf is correct in that performance is likely to be the most lucrative way to make money. It is undeniable that the business model for artists is subject to rapid change, in particular when technology is introduced and dramatically alters the landscape artists have to work with.
However, I find it curious that despite the fact that individual artists are likely to have low(er?) chances of making it big financially in music, introduction of technology has helped achieve what has long been considered one of the most troubling aspects of becoming and artist and disseminating work: access to distribution channels. Never before in history have so many people been able to access A) ways to make and distribute their own music cheaply B) ways to hear music of all kinds cheaply. This is an undoubted improvement, as far as egalitarian ideals of access to the arts are concerned.
So, are we dealing with trade-offs (sacrifices) between access and profitability? Are there other business models that could evolve to put even more control of revenues into individual artist’s hands? Is what is “wrong” with the music industry the big labels in charge promoting watered down music, or the poor tastes (and thus, demands) of mass consumer culture?